Brown and Cameron court business leaders

Gordon Brown and David Cameron today tried to woo the business community, with the chancellor holding a Downing Street summit with City financiers, and the Conservative leader addressing small business leaders.

Mr Brown welcomed what the Treasury called a "high-level group" meeting of City grandees to Number 11, where the chancellor - wooing the financial sector ahead of his likely promotion to prime minister next year - promised to cut business regulation and kept corporate tax levels "competitive".

Meanwhile, Mr Cameron pointedly did not stamp down speculation today that the Tories were on the brink of proposing the abolition of stamp duty on share sales, something Labour claims would cost £4bn.

The Tories tomorrow publish their interim tax report, chaired by former minister Lord Forsyth, which is expected to recommend tax cuts totalling £19bn, including a thorough overhaul of business taxation.

The shadow chancellor, George Osborne, is said to be "very keen" on the idea of cutting share stamp duty, which may boost the London Stock Exchange by as much as £150bn.

Mr Cameron did not mention it in the text of his speech today in central London - but nor did he rule it out. He did, however, pledge to pull out of the European social chapter.

Both Mr Cameron and Mr Osborne have repeatedly insisted that they will not at this stage commit themselves to upfront promises of tax cuts, despite pressure from the Tory grassroots.

But today's indication of approval for the commission's proposal will send a strong message to the City and to voters that Mr Cameron intends to go into the next election on a platform of lower taxes, particularly for business.

Stamp duty is currently levied at a rate of 0.5% on the purchase price of shares and raises £4bn a year for the Treasury.

Studies suggest that it depresses share prices by around 10% and that abolition could increase the market capitalisation of the FTSE all-share index by £150bn. However, the economic secretary to the Treasury, Ed Balls, said that Conservatives needed to explain how they would pay for such a cut.

"The immediate question you have to answer is where is the money is going to come from? How are you going to pay for that £4bn commitment? George Osborne has given us no answers," he told BBC Radio 4's The World At One.

Mr Balls, who was given responsibility for the City by Mr Brown in May, was the first to address the chancellor's summit this morning.

Mr Balls, traditionally regarded as Mr Brown's closest colleague, has gone out of his way in recent weeks to reassure the City over issues such as bank profits and City bonuses.

Mr Brown, writing a piece for today's Financial Times ahead of the inaugural meeting of the "high level group", said he would maintain a "light regulatory touch and a competitive tax environment".

He said: "The City's global success illustrates what each nation needs to advance in the new economy - stability, openness, inventiveness and high-level skills.

"Enhancing those strengths while maintaining a light regulatory touch and a competitive tax environment, and resolving key issues such as infrastructure, will be critical for the future."

He said he would consult with financial bosses to ensure EU directives were not too burdensome and pledged to cut regulatory burdens on business by 25%.

He wrote: "At all times we will promote a risk-based approach to regulation in areas where the Treasury is directly responsible, such as asset freezing, and we are today announcing a target to reduce regulatory burdens by 25%.

The wooing of business comes against the backdrop of the company law bill in the Commons. An amendment to that would see companies having to produce social and environmental audits of their supply chains.

Although the CBI has complained about the measure, campaigners point out that it is less onerous than a similar measure proposed by the chancellor under the operating and financial review, unceremoniously scrapped by the Treasury before it even came into force.

In his speech today, Mr Cameron called himself a "champion of small business", saying a future Tory government would cut regulation and look at aligning the national insurance and income tax systems.

The Tory leader said he wanted to "help the smallest firms first" if elected.

He also pledged that a Conservative government would pull out of the European social chapter.

He told a conference in central London: "No British government will ever build an environment in which enterprise can truly strive unless it controls the power to legislate in this area.

"That's why Britain must not stay in the social chapter."

He added: "I know this is controversial. But I will be guided not by dogma - either Europhile or Europhobic - but a hard-headed assessment of what works for Britain."

Mr Cameron said it was "obvious to anyone who knows anything about business" that the social chapter "doesn't work".